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  • A stark profit warning from Darden Restaurants (DRI) starts to take on the appearance of an issue with execution after McDonald's turns around its global sales numbers and Yum Brands issues a rosy forecast for profit growth. The performance of Red Lobster and Olive Garden in particular are in focus for 2013. [View news story]
    You can't publicly diss your employees and then expect the public to support you. Plus, if your employees are unhappy, it carries over to how they treat the customer.
    Dec 10 10:12 AM | 1 Like Like |Link to Comment
  • The restaurant sector is on watch after a profit warning from Darden Restaurants points to weakness, not in Europe or China, but at home in the U.S. While increased promotional activity in the sector is behind part of the slip from Darden, the bigger question is why are sales so weak for big players if consumer confidence is supposedly bouncing back? [View news story]
    Darden, Applebees, Papa Johns, are all weak because they took sides to screw their employees. The word is getting out.
    Dec 4 09:58 AM | Likes Like |Link to Comment
  • The Supreme Court healthcare opinion: The individual mandate survives as a tax. You can read the full opinion here.  [View news story]
    What are you guys whining about? You should be happy, now all the supposed freeloaders that have been getting medical treatment in emergency rooms will have to buck up and pay their fair share.

    Big business has been taking away employee benefits for years, first by putting you in an HSA that you have to fund an ever increasing percentage of, and then reducing the number of hours you can work to less than 40 so they don't have to pay any benefits at all.

    The country is still sliding into the abyss, but at least the little guy has something to cheer about . . . for a day.
    Jun 28 11:21 AM | 3 Likes Like |Link to Comment
  • Housing Double Dip Confirmed [View article]
    I'd look for another 10 - 20 % "correction". Where are the new buyers going to come from, the 25% of mortgages underwater, or the people that have already lost their homes? I think not.

    If you live in a neighborhood with a foreclosure across the street (and who doesn't), are you going to swallow hard and take a 30% hit, or are you going to hang tough? Housing has nowhere to go but down, even from these low levels.

    With renting only being 1/2 - 2/3 the cost of owning, why would you want to own, especially if property values are still going down?
    Dec 1 12:43 PM | 3 Likes Like |Link to Comment
  • Obama tried to play it safe and took a beating but there's a lot he can do in the next two years, Paul Krugman writes. He can engineer significant relief to homeowners, an area where he has "dropped the ball," and propose real measures to create jobs and aid the unemployed, putting Republicans "on the spot for standing in the way of the help Americans need."  [View news story]
    Obama did drop the ball, he bailed out the status quo. The banks, Wall Street and big business get to live for another day. But the day of reckoning is fast approaching.

    Think the Republicans have an answer? Think again. Cutting taxes and reducing the deficit don't go hand in hand. Bush cut taxes and the deficit skyrocketed. Our current plight is due to Bush taking us off a cliff, not to anything Obama did.

    Obama's problem is that he is a wuss and took too much advise from insiders that caused the financial collapse. He should have bailed out the people in the housing market that played by the rules, not the ones that were scamming the system.

    SuperBen thinks he can print money to help us climb out of the hole. All he is doing is building the house of cards higher, until it all comes tumbling down.
    Nov 5 12:14 PM | 2 Likes Like |Link to Comment
  • Oct. ADP Jobs Report: +43K vs. +23K expected and -2K prior (revised from -39K). "Since employment began rising in February, the monthly gain has averaged 34,000 with a range of -2,000 to +65,000 during the period... [but] employment gains of this magnitude are not sufficient to lower the unemployment rate."  [View news story]
    "deadbeats and freeloaders"?

    I was being sarcastic. I am sure the vast majority of people on unemployment insurance would rather be working, although there's a percentage that look at unemployment as a "paid vacation."

    The problem with the economy is that there is nothing on the horizon that will dramatically improve the job market. We don't make anything here anymore, so the best these people can hope for is a lower paying service job, or a couple of part-time jobs, all with NO benefits.

    Somehow, the government has to incentivize businesses to hire. Seems to me one way to do that would have businesses hire people for 40 hour work weeks, pay them for 30, and have the gov't pick up the difference. It gets these people back to work, reduces government assistance, helps companies expand and gives these people some money so they can start consuming again.
    Nov 3 12:54 PM | Likes Like |Link to Comment
  • Oct. ADP Jobs Report: +43K vs. +23K expected and -2K prior (revised from -39K). "Since employment began rising in February, the monthly gain has averaged 34,000 with a range of -2,000 to +65,000 during the period... [but] employment gains of this magnitude are not sufficient to lower the unemployment rate."  [View news story]
    As soon as unemployment benefits expire and people have to find a job, or starve, the unemployment rate will nosedive. The deadbeats and freeloaders will finally have to get off the government handout wagon and get a job.

    And where will these jobs be? Look no further than the progressive state of Indiana. Indiana can see the handwriting on the wall and has hired armed guards for all of its unemployment centers.

    I can see it now, the fastest growing jobs sector will be the hiring of armed guards, first for unemployment centers then for grocery stores, then for guys driving around in Mercedes and BMW's, then for . . .

    Don't you just love this compassionate conservatism?
    Nov 3 09:11 AM | 1 Like Like |Link to Comment
  • "The moralizers are winning," Paul Krugman frets; more and more voters are convinced that we need "more punishment," not more stimulus, because debt relief is a reward for bad behavior. "The irony is that in their determination to punish the undeserving, voters are punishing themselves," he says, by perpetuating high unemployment.  [View news story]
    Last time there was a surplus, Clinton was president. 1st president to really start running up the deficit was Ronnie Reagan. Truth is neither party is fiscally responsible. Democrats spend money to help the Have-nots. Republicans lower taxes to help the Haves. Neither party is willing to raise taxes AND cut spending.

    All we have to look forward to is more government gridlock and more debt. And more armed guards at unemployment offices when benefits aren't extended (all states, not just Indiana).

    In two years, we might have armed guards at grocery stores.
    Nov 1 11:53 AM | 5 Likes Like |Link to Comment
  • China shows a willingness to exploit its monopoly position in the production of rare earth elements, and combined with its behavior on other fronts - exchange-rate policy, state subsidies that help firms gain key contracts, pressure on foreign companies to move production - Paul Krugman says it's "a rogue economic superpower, unwilling to play by the rules," and the rest of us better do something about it.  [View news story]
    Don't forget the part about shipping all of our manufacturing to China, giving them the keys to all future innovation. Then, once they've bled us dry and don't need us anymore, they can quit buying our debt and bankrupt us.

    Death by greed, welcome to the new economy.
    Oct 18 12:28 PM | 1 Like Like |Link to Comment
  • With the foreclosure mess spreading to Frannie, Megan McArdle agrees that the worst-case scenario isn't banks going bust, it's that a title-insurance breakdown devastates the resale market - which means not that the banks are getting theirs, but that you can't sell your home either.  [View news story]
    Can't sell a house . . . that's nothing new. Just a matter of time before all the people underwater (25% of all mortgages) decide to cut their losses and walk, especially when housing has no chance of recovery (at least in our lifetime).

    Too bad the original stimulus wasn't targeted to the people that played by the rules, instead of the people that shouldn't have gotten loans to begin with. A government subsidized interest rate of 0 - 2% (5 yr length ) to homeowners living in their principal home and having the means to pay for it, would have done a much better job of stabilizing the housing market than an $8K giveaway and trying to keep people in houses they had no way of paying for.
    Oct 14 03:17 PM | 3 Likes Like |Link to Comment
  • Existing Home Sales Plunge, Despite Government's Help [View article]
    The problem with the housing market was people that shouldn't have gotten loans, got them; and speculators bought 3, 4, 5, or more properties, all with nothing down. When this great "pyramid" scheme failed to keep adding buyers, the housing market collapsed and the rest of us get to pay for it. (I guess some regulation would have been good!)

    It will be 10 years, or more, before things start getting back to "normal" (if they ever do). And they might get a heck of a lot worse before that happens.

    This is like the Titanic, the housing bubble was the iceberg and for a while, the pumps (stimulus) looked like they were working, but we've run out of gas and we're starting to fill with water again. It will take a while, but we are slowly sinking under our mountain of debt.

    We built a great house on a MN golf course for $600K in 2003. Due to my wife's health issues, we had to move to Florida 2 years ago. The MN home is still on the market ($480 K) at a price that keeps the banks from getting involved. It is not selling, and probably won't for quite some time (2 foreclosures across the street).

    Thus far we've lost $200K- $220K ($120K on the house, $40 - 50K/yr paying for a house we don't live in). Renting it is an option, but then I will be subsidizing the renter to the tune of about $800 - 900/ month. Not a pleasant scenario.

    Though I would hate to do it, the last option would be to walk. If I walk, then it will be difficult to start a small business in Florida, (one that could add 6-10, $40 - $50K jobs).

    I have the feeling there are a lot of other people in this country that are in a similar situation. With the housing market stagnant, people are trapped and not able to move or free up capital that could be used to expand businesses and create jobs. (Not to mention all the realtors, appraisers, office people, mortgage people, etc. that owe their livelihood to a robust housing market.)

    The way I see it, we're looking at 10 years of stagflation or worse. Unless something comes along to kick start the economy. What's that going to be, putting windmills and photovoltaics on roofs? (At least we will need a lot of installers for that Chinese equipment.)

    The last couple of years, the government did it all wrong in trying to save mortgages of people that shouldn't have had them in the first place. They also screwed up by bailing out all the banks that got us into the problem.

    The correct action would have been to let nature take its course on all the properties 5% or more underwater and ALL speculators. For the rest of us (one mortgage) that were playing by the rules, the government should have been subsidizing our mortgage interest payments so we had an effective rate of 1 - 2%. This would have put a floor under the housing market and money into the hands of responsible people.

    Instead, the schemers got the bailout and the rest of us get to pay for it.
    Aug 25 12:28 PM | 3 Likes Like |Link to Comment
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